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Home > Prudential Regulation Authority > Supervisory approach documents

Supervisory approach documents

Assessing risk  |  Information for smaller firms  |  Mitigating risk  |  Proactive intervention framework  |  Regulation of insurance

The Prudential Regulation Authority (PRA) approach documents set out in one place the PRA’s role and how it intends to carry this out. Originally published for comment by the Bank of England and Financial Services Authority (FSA) in October 2012, the documents were revised and re-published when the PRA formally assumed its responsibilities on 1 April 2013. A further revision was released in June 2014 which contains a new foreword from Andrew Bailey and other amendments made in response to policy and legislative developments since April 2013 including a new secondary objective; to promote effective competition in the markets for services provided by PRA-authorised firms.

The two documents - one for deposit-takers and investment firms, the other for insurance firms - describe the PRA’s statutory objectives, the approach the PRA takes to advancing them, the expectations that the PRA has of the firms it regulates, and how the PRA intends to assess firms against them.
In describing what the PRA seeks to achieve and how it goes about it, the documents support accountability to the public and Parliament, and a common understanding with regulated firms. They also fulfil the PRA’s statutory obligation to issue guidance on how it will advance its objectives.
The approach documents are an integral part of the PRA’s prudential policy framework, acting as a standing reference for PRA-authorised firms. The expectations of firms that the documents set out are designed to promote safety and soundness, appropriate protection for policyholders, and to elaborate on the statutory Threshold Conditions and Fundamental Rules.
Many of these expectations already reflect detailed rules in the PRA Handbook. The Handbook sets out many further detailed expectations. The approach documents set out some of the core expectations concisely, in one place, making clear how they relate to the PRA’s statutory objectives, the Threshold Conditions and Fundamental Rules and acting as a single, easily navigable reference.
The PRA aims to keep the approach documents materially up-to-date at all times, having them act as a principal point of reference for interested parties.